Country Commercial Guide - Doing Business in the UK

Introduction to the UK Country Commercial Guide 2015

The Country Commercial Guide (CCG) is a comprehensive annual review of the United Kingdom's commercial, economic, political and investment environment. The information contained in the CCG will assist U.S. companies who wish to do business in the UK. Below you will find the introductory chapter of the CCG, which includes the UK market overview, its challenges, opportunities and market entry strategy. The remainder of the CCG consists of the following chapters:

Market Overview

The United Kingdom (estimated 2014 GDP of $2.8 trillion) has the sixth-largest economy in the world according to the CIA's 2014 World Factbook, the third-largest economy in the European Union, and is a major international trading power.

While the United Kingdom is geographically relatively small (about the size of Oregon), it has a population of more than 66 million people.

Highly developed, sophisticated, and diversified, the UK market is the largest in Europe and the fifth largest in the world for U.S. goods exports. The United Kingdom is the second largest market in the world for U.S. service exports.

With few trade barriers, the United Kingdom serves as the entry market into the European Union for more than 43,000 U.S. exporters.

U.S. exports to the UK of goods and services combined were estimated to be worth about $110 billion in 2014.

The United Kingdom remains the number one overseas market for travel to the United States with nearly 4 million UK travelers estimated to have visited the United States in 2014.

The U.S.-UK investment relationship is the largest in the world with cumulative bilateral stock in direct investment valued at nearly $1.1 trillion in 2013. Over two million jobs, approximately one million in each country, have been created over the years to manage and drive this investment.

More than 7,500 U.S. firms have a presence in the United Kingdom which is also the top location in Europe for U.S. regional headquarters covering Europe, the Middle East, and Africa.

The UK economy grew by 2.8% in 2014, reflecting a continued recovery from the recession. The economy is expected to remain relatively strong in 2015 with forecast growth of 2.5%.

A major international financial, media, and transportation hub, London is also headquarters to the European Bank for Reconstruction and Development (EBRD).

“Devolved Administrations” present some differences in policies and regulations among England, Northern Ireland, Scotland and Wales. While Scotland voted to stay in the UK in 2014, the Scottish National Party has won the most seats in Scotland and is determined to see greater devolution, including fiscal autonomy, for Scotland.

The UK government has introduced deep cuts to public sector spending, affecting many businesses and, more broadly, consumer confidence. Despite an improving economic picture, the government is committed to reducing its deficit and the cuts are likely to continue now that the Conservative party has won a majority in parliament.

A debate has arisen about the UK’s future membership in the EU. The current government is committed to offering an in-out referendum on EU membership by 2017.

Market Opportunities

The United Kingdom is a highly sophisticated market with strong demand for products and services that improve productivity, including ICT software and services that lower costs and improve business efficiencies.

There is ongoing, strong demand for a wide range of equipment and services related to safety/security and, in particular, cyber security.

The United Kingdom’s commitment to low-carbon targets is driving market demand for U.S. products and services in the area of renewable energy, energy efficiency, low carbon/green technologies, smart grid technologies and e-vehicles.

The proposed U.S.-EU Transatlantic Trade and Investment Partnership (TTIP) has the potential to cut tariffs and address market barriers, thus creating additional opportunities in the UK for U.S. exporters.